With Ford’s rollout of RIM and Hyundia’s switch from Smartstock to PartsEye, we explore how dealers might make the transition with ease as well as best practices for managing any Manufacturer program successfully.
For those shifting from no manufacturer program to RIM or some other new program, learning how your Manufacturer or vendor is going to collect sales and process the daily stock orders on guaranteed parts is an essential first step. Preparing really just means taking the time to understand the process and demands and then monitoring the results closely to catch issues early on keeping your inventory healthy. Spending time on the manufacturer or vendor website and learning the approval process is key to launching your understanding of the program.
Dealers should be prepared to still do stock orders on parts that are not guaranteed inventory. There is this belief that the Manufacturer or Vendor (Partseye) takes over all the stock orders and ordering, this is not so. For instance, Hyundai and Partseye, we’ve learned that they do not order any batteries and chemicals. These products have to be ordered separately, so sourcing these commodities upfront would be wise.
Typically, it takes several weeks for the Manufacturer/Vendor to process parts and sales and build a history file. We have seen more than a handful of dealerships that were running out of parts that were sold and not reordered as they were not selected yet.
Doing regular physical inventory counts, especially on slower moving quantities, can really help out on fill rates and embarrassing “stock out” situations where it showed it in stock and really wasn’t. This occurs more with slower-moving stock that potentially had an issue with receipting the part, returns, credits, or just plain operator error. It happens daily!
Dealers on an ASR or heading in that direction need to treat their inventory as two separate values:
- Guaranteed Inventory is one value
- Non Guaranteed Inventory as another value
In some cases, there will be the third value of Aftermarket Inventory.
ASR (Automatic Stock Replenishment) Programs were designed for the Manufacturers to control their own supply chain and pipeline velocity and in many cases do not benefit the dealer. Many without any return allowance or accrual on the guaranteed parts that they are supplying. This leads to very little dollars to accrue for purging obsolete inventory. When you consider that if 50% of your inventory is guaranteed on average, this leaves a lot of unprotected inventory with no avenue to purge the obsolete parts. Learning to accrue some dollars from the Gross Profit or increasing the profit margin is going to be a must to purge obsolete inventory in the future!
PartsEdge helps dealers on PartsEye by selecting the guaranteed inventory and isolating it from the Non-Guaranteed parts so that you can easily order parts and keep the shelves from going empty!
With Ford and RIM, we identify the parts guaranteed in a field that allows us to see daily what has been approved and isolate them so you can order the product that is selling and, again, not guaranteed. Keeping the guaranteed inventory and the non guaranteed inventory separate is almost a must unless you want to shift through a bunch of inventory that you don’t want to see if you do place a stock order.
Want to learn more about how PartsEdge helps Parts Managers and their teams manage complex manufacturer programs and DMS settings? Send us a message.